Legislature(1999 - 2000)
05/06/1999 08:11 AM House STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE May 6, 1999 8:11 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative John Coghill Representative Scott Ogan Representative Beth Kerttula Representative Harold Smalley MEMBERS ABSENT Representative Jim Whitaker Representative Bill Hudson COMMITTEE CALENDAR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 179 "An Act eliminating the Alaska Public Offices Commission and all campaign contribution and expenditure limits; transferring the administration of lobbying, conflict of interest, and financial disclosure statutes from the Alaska Public Offices Commission to the division of elections; relating to reporting of campaign contributions and expenditures; defining 'full disclosure,' 'purposely,' 'recklessly,' and 'resident'; amending the definition of 'contribution,' 'group,' and 'political party'; changing the residency requirements for candidates for public offices; and providing for criminal penalties for violation of these provisions." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 179 SHORT TITLE: APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST SPONSOR(S): REPRESENTATIVES(S) COGHILL, Sanders Jrn-Date Jrn-Page Action 4/07/99 671 (H) READ THE FIRST TIME - REFERRAL(S) 4/07/99 671 (H) STA, JUD, FIN 4/15/99 (H) STA AT 8:00 AM CAPITOL 102 4/15/99 (H) <BILL CANCELED> 4/19/99 866 (H) SPONSOR SUBSTITUTE INTRODUCED 4/19/99 866 (H) READ THE FIRST TIME - REFERRAL(S) 4/19/99 866 (H) STA, JUD, FIN 4/22/99 (H) STA AT 8:00 AM CAPITOL 102 4/22/99 (H) HEARD AND HELD 4/27/99 (H) STA AT 8:00 AM CAPITOL 102 4/27/99 (H) BILL CANCELED 4/29/99 (H) STA AT 8:00 AM CAPITOL 102 4/29/99 (H) HEARD AND HELD 4/29/99 (H) MINUTE(STA) 5/06/99 (H) STA AT 8:00 AM CAPITOL 102 5/06/99 (H) HEARD AND HELD WITNESS REGISTER RYNNIEVA MOSS, Legislative Assistant to Representative Coghill Alaska State Legislature Capitol Building, Room 416 Juneau, Alaska 99801 Telephone: (907) 465-4530 POSITION STATEMENT: Provided information on HB 179. MARTIN SCHULTZ, Assistant Attorney General Civil Division Governmental Affairs Division Department of Law 1031 West Fourth Avenue Anchorage, Alaska 99501 Telephone: (907) 269-5156 POSITION STATEMENT: Provided information on HB 179. BROOK MILES, Regulation of Lobbying Alaska Public Offices Commission Department of Administration P.O. Box 110222 Juneau, Alaska 99811-0222 Telephone: (907) 465-4864 POSITION STATEMENT: Provided information on HB 179. ACTION NARRATIVE TAPE 99-34, SIDE A Number 0001 CHAIR JEANNETTE JAMES called the House State Affairs Standing Committee meeting to order at 8:11 a.m.. Members present at the call to order were Representatives James, Coghill, Ogan, Kerttula and Smalley. HB 179-APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST CHAIR JAMES announced that the only order of business before the committee is SSHB 179 "An Act eliminating the Alaska Public Offices Commission and all campaign contribution and expenditure limits; transferring the administration of lobbying, conflict of interest, and financial disclosure statutes from the Alaska Public Offices Commission to the division of elections; relating to reporting of campaign contributions and expenditures; defining 'full disclosure,' 'purposely,' 'recklessly,' and 'resident'; amending the definition of 'contribution,' 'group,' and 'political party'; changing the residency requirements for candidates for public offices; and providing for criminal penalties for violation of these provisions." She mentioned that the committee has two versions of SSHB 179 before them. Number 018 REPRESENTATIVE COGHILL pointed out that the difference between the version before the committee yesterday and today's version is that the language was not kept consistent with the change from "division" to "center." Number 033 REPRESENTATIVE OGAN moved to adopt proposed CSSSHB 179, version LS0401\I, as the working document before the committee. There being no objection, it was so ordered. REPRESENTATIVE COGHILL explained that there are several changes which resulted from testimony, suggestions from committee members, and additional language making SSHB 179 clearer. He referred to the title on page 1 and noted that it is still an Act eliminating the Alaska Public Offices Commission. However, the same acronym, APOC, is utilized for the establishment of the Alaska Public Offices Center which remains within the Division of Administration. Representative Coghill mentioned that the three major principles he chose to guide the movement of this particular bill are maintained. The bill maintains the separation of powers between the judiciary and the administrative aspects, while allowing for open disclosure and no limits, although there are some regulations as to how those funds can be spent and reported. He noted that the public offices center will be adjacent to the Division of Elections affording a possible candidate the ability to apply for candidacy near where the reporting takes place. REPRESENTATIVE COGHILL referred to Section 1, paragraph (1), "the purpose of campaign disclosure is to make available to Alaskan voters all information concerning contributions and expenses of political candidates" which he identified as the intent behind this legislation. The legislation also hopes to, as paragraph (2) states, "...to make campaign laws less ambiguous and burdensome to both the candidates and to their supporters" which provides a clearer environment. He continued with the purpose discussed in paragraph (3), "the purpose of this Act is to produce a simplified reporting system that is less intrusive and gives optimal freedom with fair accountability. The aim is to arrive at full disclosure ...." Number 117 REPRESENTATIVE COGHILL explained that Section 3 is existing statute. He noted that Section 3 repeals AS 15.13.020, which established the [Alaska] Public Offices Commission. Section 3 would de-politicize those working within the [Alaska] Public Offices Center. Section 4 outlines the duties of the center, such as preparing the forms and displaying the reports. CHAIR JAMES commended Representative Coghill for his work and noted this is a drastic change that will require a lot of work to bring people along on this issue. She agreed with the "Findings and Purpose" of the legislation which she believed had much merit. She commented that the public has indicated the need for less rules and regulations leaving the public to decide whether a candidate is honest or not from the disclosure. Chair James announced that she would like to move SSHB 179 onto the House Judiciary Committee. REPRESENTATIVE COGHILL referred to page 23, Section 24.45 which relates to lobby regulations, noting that the word "Center" is added which would also be the case on page 33, AS 39.50 which deals with conflict of interest. Those are really changes in address versus substantive changes. Number 208 CHAIR JAMES clarified that the additions in those cases are the same as they are currently, except for the change in title. REPRESENTATIVE COGHILL agreed. He referred to page 6, Section 5 which was taken, for the most part, from the current APOC regulation with regard to contributions. Section 5 also outlines what one would have to report on the form provided by the center. He pointed out that there is a provision that allows for the form to be provided electronically or by hard-copy. He referred to page 4, line 21, noting that language requiring a report of the aggregate of those contributions under $100. He noted that the same criteria utilized for contributions is utilized for loans as well. Number 252 REPRESENTATIVE COGHILL explained that page 4, subparagraph (E) deals with detailing records. He noted that the bookkeeping system was taken from the APOC as it is currently in order to allow for inspection. He moved to Section 6, page 6, and stated, "Those who are going to oppose or support a candidate before they can make an expenditure in support of or opposition, they need to come to the APOC, the center, and register that they are in fact doing that." CHAIR JAMES inquired as to who "each person" refers in Section 6,"(a) Before making an expenditure in support of or in opposition to a candidate or before making an expenditure in support of or in opposition to a ballot proposition or question, each person other than an individual shall register." Number 287 RYNNIEVA MOSS, Legislative Assistant to Representative Coghill, explained that the definition of "person" includes groups, political parties, and those that would have to register. REPRESENTATIVE COGHILL pointed out that the definition section begins on page 20. REPRESENTATIVE COGHILL continued with Section 7 which deals with campaign treasurers. The candidate is assumed to be the treasurer if no treasurer is appointed. Section 7 also specifies that those running a campaign for a ballot issue, or some other issue, also have to have a treasurer. He moved on to Section 8 regarding audits. He said, "...starting in (c) on line 18, if there is a 'failure, refusal or neglect to cooperate with the Center by a candidate, group, political party, municipality, or individual could result a person being fined and/or convicted.' And what we wanted to do was we wanted to take it out of the center's hands by saying, if you find in an audit then under [AS 15] 13.125 and [AS 15] 13.170, a civil or criminal action could ensue. It goes out of the hands of the department at that point, or the center, and goes over for court action." CHAIR JAMES said that would assume that it's not automatically going to court action or would somebody have to file an action. Number 334 REPRESENTATIVE COGHILL confirmed that an action would have to be filed, either by the center or by an individual. The center would only show that there was probable cause, but would not begin the action. He added that there could be civil penalties which are outlined in SSHB 179 regarding late filing. If there is an accusation, this provides the center the opportunity to say, "Bring your books and let's take a look at them." CHAIR JAMES commented that Representative Coghill seems to desire full disclosure. She asked if the center found irregularities, would such be recorded on the Internet so that the general public has access to that information. REPRESENTATIVE COGHILL replied yes. If there is a violation, that is on the record for open disclosure. CHAIR JAMES asked if a violation would appear on the Internet before the candidate had an opportunity to defend himself or herself. Would the center contact that candidate with regards to a violation? REPRESENTATIVE COGHILL explained that the legislation includes a provision requiring the center to notify the candidate within five days of a challenge or failure to disclose. Before any action begins, notification must occur. There is also a civil penalty that will ensue and can be appealed, if the records are shown to be in order. Number 400 CHAIR JAMES expressed concern with the notion of "innocent until proven guilty." She did not have a problem with drawing attention to something, but she did not want there to be an assumption that there is a violation until such a determination has been made. REPRESENTATIVE COGHILL noted that determining when to "put a flag up on the screen or the file" was a struggle. The five-day notification process provides a week for response. He commented that in a political race weeks are very important. CHAIR JAMES asked if under this full disclosure, would the exchange between the center and the candidate be on the candidate's file. If a candidate missed a filing deadline for health reasons or a death in the family, would the five day notice go in the candidate's file for the public to review. If the candidate responds to the center with one of the aforementioned excuses, would that be filed for the public to review as well. REPRESENTATIVE COGHILL replied that there is not a provision for such a communication to be on the Internet. He said that he was primarily interested in ensuring that the transactions for expenditures, contributions, and failure to disclose were addressed. CHAIR JAMES pointed out that there are as many complaints about APOC as there are about the candidates or the contributors. She believed that if there is going to be full disclosure, the communication between APOC and the candidate should be on the candidate's report for public review. Number 470 REPRESENTATIVE OGAN expressed concern with Section 26, which reads, "A qualified Alaska resident may bring civil action and/or file a complaint for criminal action with the district attorney to enforce any of the sections of this chapter." He foresaw someone filing a criminal action for the sake of discrediting the name of the candidate which would result in legal fees and other complications. CHAIR JAMES asked if that was currently allowed. REPRESENTATIVE OGAN pointed out that it is a new section. REPRESENTATIVE COGHILL clarified that cause would have to be shown and then the proof is on failure to disclose. There are criteria for civil and criminal action in this as well as civil penalties. He believed an individual would have to have a clear case based on this law to bring a civil action for failure to disclose. Number 502 CHAIR JAMES asked if SSHB 179 makes it easier or more difficult for a candidate to do that than in existing law. REPRESENTATIVE COGHILL said he could not answer that. REPRESENTATIVE OGAN said that he believed the commission has the authority to recommend whether or not there is a criminal violation under the current language. He further stated, "You take a look at the ethics charges that go on in a campaign, you get into a really close race - and I can think of one ... and suddenly these ethics charges brought against different candidates and a lot of times people do that as a political strategy rather than any substantive charges." He predicted that this would be used as a political tool against candidates. CHAIR JAMES asked if SSHB 179 included a restriction regarding when such things can be filed during an election. REPRESENTATIVE COGHILL replied yes. CHAIR JAMES asked if everything in a campaign is listed on the candidate's report and is available for public review, wouldn't that place the onus on the person making the charge as opposed to giving protection to the person who is not. Number 542 REPRESENTATIVE KERTTULA stated that this would actually allow a person to file a formal complaint for even criminal action. She further stated, "I've never seen it happen and ... I'm sure it wasn't in the APOC statute - before you'd have to go through the district attorney's office to screen to be able to file a criminal (indisc.--simultaneous speech)." Representative Kerttula agreed with Chair James regarding the reporting, but noted that this allows the case to be brought forth. REPRESENTATIVE COGHILL commented that the legislation may be off-base on that point. Bringing a civil action is well within your limits, but bringing a criminal action still has to go through the district attorney. CHAIR JAMES inquired as to how things that have been published in the newspaper over the years would have been different if full disclosure had been in place. Number 573 REPRESENTATIVE COGHILL stated, in his view, that full disclosure comes with a higher degree of responsibility. Therefore if this is open to the public and a problem is found, there should be recourse. He did not believe that to be frivolous because one would still have to go before a judge. Representative Coghill agreed with Representative Ogan's point that somebody could just make a charge which would be damaging, just as is the case in accusations of child abuse sometimes the entire story is never heard. REPRESENTATIVE OGAN commented that full disclosure already exists. CHAIR JAMES agreed there is full disclosure, however, that information is not current. Much time passes between the reporting deadlines. She also indicated the need to report who pays for a candidate's television time. REPRESENTATIVE KERTTULA noted that is reported. CHAIR JAMES reiterated there is a long period of time during the campaign before the 30-day report is required and nobody knows what is happening during that time. She expressed concern with that time period. Number 628 REPRESENTATIVE COGHILL commented that, from his understanding, the contributors and voters do not know the contribution limits or the laws which apply to contributions. This legislation eliminates the limits and makes it open immediately so that the public has the ability to make that judgement call which he believed provided a higher degree of accountability. CHAIR JAMES informed the committee that she likes full disclosure and does not have a problem with reporting every half a month, but in order to achieve such something must be offered. If the limits and specific things are lifted, then full disclosure is not so burdensome and a give-and-take situation would exist. REPRESENTATIVE COGHILL referred to page 15, line 23, Section 26, and asked Representative Kerttula if it would be better on line 23, after "and or," to insert "formal" so that it would read, "file a formal complaint for criminal actions with the district attorney to enforce any of the sections in this chapter." Number 659 REPRESENTATIVE KERTTULA pointed out that the representative from the court system might be able to comment on that. However, she noted that an individual can always file with the district attorney, which means the individual could phone the district attorney. Therefore, Representative Kerttula believed that inserting "formal" might create another process making it more difficult. REPRESENTATIVE COGHILL said he is open for discussion, however, the next committee of referral is the House Judiciary Committee which may be better able to address that issue. REPRESENTATIVE SMALLEY referred to Section 4, page 3, lines 12-16 and read the following: "and shall charge an at cost fee for reports not electronically filed to cover the cost of keying in the report." Although candidate's should be encouraged to use electronic filing, there will be situations in which electronic filing will not be available to a candidate. This would actually penalize a candidate who is already operating "off a shoestring" budget or does not have the ability to file electronically which creates an unfair burden. REPRESENTATIVE COGHILL said he did not necessarily disagree with Representative Smalley. He said he was trying to create incentives for computerized filing and discourage paper flow. Number 699 REPRESENTATIVE SMALLEY suggested that if the report is not filed electronically, it could be filed the day prior to electronic filing. CHAIR JAMES agreed candidates should be treated equally. She indicated that a small charge of $10 for someone to electronically enter a candidate's report would be appropriate. REPRESENTATIVE COGHILL mentioned that the Division of Elections charges for lists and the copying of disks. He did not want to make this a burden to the center, but wanted to provide an incentive for electronic filing and cover the cost of a lot of paperwork. REPRESENTATIVE SMALLEY commented that even a charge of five cents is an unfair penalty to a candidate that does not have the ability or lacks the necessary equipment. CHAIR JAMES stated that everyone could be charged a fee and those that filed electronically could be excused from the fee. REPRESENTATIVE COGHILL said he would make note of Representative Smalley's point. Number 765 REPRESENTATIVE COGHILL referred to page 9, Section 12 and reiterated that corporate giving is a problem. After reviewing what the supreme court said, "That corporations were not primarily formed for political action," it was determined best to incorporate language which prohibited corporations, companies, partnerships, and anything that was not defined as a group or political action committee. He pointed out that the definition of group is defined on page 20, line 13 and "political action committee" is defined on page 21, line 13. REPRESENTATIVE COGHILL further explained if corporations wanted to have a PAC, as they can now, that... Number 795 CHAIR JAMES pointed out that corporations cannot have a PAC currently and all corporation funds are disallowed. REPRESENTATIVE COGHILL agreed. He clarified that if somebody within a corporation wanted to have a PAC, he/she would still have to have that individual input. Although the PAC could still be called the "xyz" company PAC, only individuals could contribute to it and the reporting would be under the group's name. CHAIR JAMES said that she did not believe this language reflected that intent. REPRESENTATIVE SMALLEY inquired as to the location of the requirement that a PAC be registered. Number 815 REPRESENTATIVE COGHILL referred to page 6, line 16, Section 6 (a) which reads, "Before making an expenditure in support of or in opposition to a candidate or before making an expenditure in support of or in opposition to a ballot proposition or question, each person other than an individual shall register, on forms provided by the Center, with the Center." He also noted that Section 7 outlines the requirements for the campaign treasurer which follows the reporting procedure. CHAIR JAMES referred to the definition of "immediate family," on page 20, line 17 and inquired as to the meaning of "spousal equivalent." REPRESENTATIVE COGHILL said he did not know if "spousal equivalent" would fall under "spouse" technically and legally, or if "spousal equivalent" is required. Number 838 CHAIR JAMES deferred to Martin Shultz, Department of Law. TAPE 99-34, SIDE B [Tape flipped early - no testimony was lost; approximately four minutes of blank tape.] Number 001 CHAIR JAMES asked, "If we wanted to be sure we treated spousal equivalent the same way, do we have to specifically say spousal equivalent, or would they be included in that listing." Number 022 MARTIN SCHULTZ, Assistant Attorney General, Civil Division, Governmental Affairs Division, Department of Law, testified via teleconference from Anchorage. He believed spousal equivalents are currently set out in some statutes, and those would have to be specifically included if the desire is to include that group. REPRESENTATIVE COGHILL confirmed that spousal equivalents would be added on line 17. CHAIR JAMES agreed. CHAIR JAMES asked Mr. Shultz if grandchildren would be considered "immediate family," if those grandchildren are living in the same household. MR. SHULTZ stated that anyone that the committee wishes to include should be specifically listed. For example, if the committee wanted to include the spousal equivalent's children that should be listed as well. CHAIR JAMES said she believed the definition of "political action committee" would, for all practical purposes, include corporation money which she did not think was the intent on page 21, line 14. She stated, "I think it just means a combination of two or more individuals. If we're making it only individuals can donate to PACs and only individuals can donate to groups, then I think you don't want to say, 'or a person other than an individual,' and then include them in the PACs. You're allowing a contribution from someone other than an individual and that would be like corporation money, association money ... it's always an employee's PAC." Number 110 REPRESENTATIVE COGHILL suggested then after "individuals" delete lines 13 and 14, through "which." CHAIR JAMES agreed. She informed the committee that she did not see the possibility of moving SSHB 179 out of committee. She suggested the committee work on the legislation during the interim. REPRESENTATIVE COGHILL noted another change was made on page 21, Section 31 regarding the declaration of filing procedure which was placed within the Division of Elections. The Division of Elections already has a filing declaration and the affidavit within that was included in order to simplify the application and reporting process. CHAIR JAMES inquired as to the rationale behind allowing a candidate to file to run and then allowing 15 days to file the conflict of interest statement. Is it to make filing easier or is it for last-minute filers? She wondered if filing the conflict of interest at the same time as the declaration of office is burdensome. Number 194 BROOK MILES, Regulation of Lobbying, Alaska Public Offices Commission, Department of Administration, explained that the filing of the financial disclosure statement has been required to be simultaneous with the declaration for office since it was first voted into law in 1974. Ms. Miles further explained a candidate files his/her declaration simultaneously with his/her financial disclosure statement. Fifteen days after that the candidate is required to file a registration as a candidate providing his/her campaign address, treasurer and chairman. CHAIR JAMES asked what was she was rushing to get done in the 15 days after she filed. MS. MILES replied it would have been the registration statement which asks for the name of the candidate's campaign, the mailing address for the campaign, the name of the treasurer or deputy treasurer which can be amended throughout the campaign. The registration statement also includes the depository if the candidate intends to spend more than $5,000 during the course of the campaign. She noted that information is required within 15 days after filing a state declaration or 7 days after a municipal candidate files for office. She mentioned that many incumbents already have their statement on file therefore, this would be of no concern when the candidate files his/her declaration. Frequently, an incumbent legislator does not file for office until near the end of session or after the end of session. If an annual filer wishes to file a declaration before filing his/her annual financial disclosure then those have to be filed at the same time which could occur any time after January 1 before the financial due date of March 15. Number 269 REPRESENTATIVE COGHILL mentioned when he filed as a new candidate he was not aware of all the deadlines and the different reports that were required. He said he may have failed to submit a report which he thought he had already submitted. Representative Coghill explained that he is trying to make sure that when a person considers filing for office all that information is available. Representative Coghill further stated, "And it may be that, that particular day you go down to get the application, you may not file and I understand it could be burdensome if you wait until the last minute. But I don't know if we want to accommodate that, I would rather have the simplicity of having all the filing in one place and one starting place so that once you do start, it's very clear to not only to the division, but it's also very clear to the public. ...there is probably a little more burden borne by the candidate, but I think in the interest of a clear start and a clear declaration, I think that the voters would be served by it." CHAIR JAMES mentioned that an earlier draft did not include a provision for the intent to file. That previous draft did not allow any kind of a "war chest" or taking of any contributions from anyone until the declaration of a candidacy and the conflict of interest statement had been filed. Does the new version maintain those provisions? REPRESENTATIVE COGHILL replied yes. Number 307 CHAIR JAMES inquired as to why there is an intent to file. If an individual has an intent to file, that individual can collect money. What would happen to the money, if the individual decided not to file? Can anybody file an intent to file? MS. MILES informed Chair James that anyone can file and can raise and expend money. CHAIR JAMES asked Ms. Miles what the general benefit of that is because SSHB 179 does not include such. MS. MILES explained that it is just a convenience for filers because an intent to file temporarily takes the place of a declaration. She understood with state campaigns, it is not such an issue because a person can file a declaration for office whenever they are ready to file that for the next election. She commented that the representative from the Division of Elections may have further explanation. She further explained, "But in the municipal races, which is where we first started using the letter of intent, the time period where the filing is open with the city clerk is often very close to the election day, 60 days away or something. And in some of the larger communities where the races are very competitive that was viewed as an insufficient, even if you filed on that first day, it was an insufficient time for running a competitive campaign. And so we had a letter of intent for municipal only, that would permit them to begin their fund raising earlier. Of course the letter of intent originally was all in place before the campaign finance reform was enacted by the legislature, but established more clearly and now it's more clearly still, with the supreme court decision - the 18-month prior to the election day period." Number 359 MS. MILES responded to Chair James' question regarding what a candidate should do with the money should the candidate decide not to file. Under current law, any money that a candidate has not spent is disbursed just as any other candidate's campaign is disbursed. She said, "So, it cannot be taken as personal or used as personal." CHAIR JAMES surmised then that SSHB 179, as written, does not provide for an intent to file and suggested Representative Coghill may want to review the pros and cons of that. REPRESENTATIVE COGHILL noted that within the declaration of candidacy there is the application, registration, and conflict of interest statement. He explained the reasoning behind that was to provide the general population with a clear idea of whose filed, a definite start date, and an affidavit which clarifies that the candidate is qualified. Representative Coghill acknowledged that he had not given much thought to the municipality side of this issue and therefore, would be open to discussion in that area. Number 403 CHAIR JAMES indicated that she did not feel comfortable enough with current law to sign a statement indicating that she, as the language on page 21 paragraph (4) says, "is familiar with the provisions of this chapter and the penalties for violating a provision of this chapter." She further indicated the need for candidates to check the list. REPRESENTATIVE COGHILL commented that is one of the reasons to have a definite starting place, a clear open system of open disclosure with less limits. He clarified that the specified limits relate to what a candidate can do with the money as far as personal use in order to ensure that there is a clear understanding with regard to the candidate's responsibility because the candidate will be held to a high degree of accountability. This is definitely a change from the current process. He reiterated that this change is really to provide a better understanding to the general population. He did not know that this process is any more difficult for the candidate, it is merely different. He added that this is also different for the Division of Elections and APOC. He explained that taking the limits off giving would eliminate some of the clouds surrounding what is and is not possible. Once the general populace understands that, the public will hold the candidates accountable for that and watch the process. Currently, even the supreme court has difficulties regarding determinations of what can and cannot be done due to some of the laws that the legislature has made. CHAIR JAMES commented that campaign finance law has been supported so the public does not have to worry about it; the rules are established. However, Chair James believed that the responsibility has been taken away from the public to be responsible about noticing what candidates are doing instead of just believing what the newspaper reports. Number 469 REPRESENTATIVE COGHILL referred to page 13, Section 21 regarding the use of campaign contributions. He acknowledged the concern that open disclosure and the lifting of some of the limits would create "rich people." That concern resulted in the language in Section 21 which says that campaign contributions cannot be converted for personal income, cannot be loaned, and purchases must be at a fair market value (a car cannot be purchased for $10). He said that the candidate needs to be held accountable for that. Representative Coghill pointed out that although this legislation includes some major changes, there are many similarities between this legislation and the current regulations. He reiterated the need for a clearer process. CHAIR JAMES asked if the list of campaign contribution uses in this legislation is similar to those in existing law. REPRESENTATIVE COGHILL informed Chair James that the list of campaign contribution uses was taken out of the regulation. He noted that the legislation attempts to make it as clear as possible. CHAIR JAMES pointed out that this legislation allows candidates to spend up to $1,000 to attend political functions; is that different? REPRESENTATIVE COGHILL replied no. CHAIR JAMES asked, is that currently allowed? UNIDENTIFIED SPEAKER replied yes. Number 513 REPRESENTATIVE OGAN indicated that the structure of the limits regarding who can contribute basically eliminates the ability for corporations and various groups to contribute. The language in the current legislation would allow the contribution of any amount. Representative Ogan said that the legislation would seem to narrow the contributors to a few that control large sums of money that go into campaigns versus a broad sphere of influence under which many can give money which is of concern. He also expressed concern with the elimination of the limits when people potentially stand to make millions on legislation moving through the process. He said that $100,000 is a small price to pay to gain influence over legislation; that is of serious concern and will make corruption worse. Representative Ogan said that he would rather return to opening up who can give while placing a limit on that amount which would allow many to give a little. Such an approach would not seem to allow any one person more influence than another person. Representative Ogan believed this legislation would provide a select group of wealthy individuals more influence than desired. CHAIR JAMES posed the scenario in which an individual gave a candidate $100,000. Under the current system, the candidate would not have to report the receipt of the money, but the individual would have to report that they gave a gift of $100,000. The report of that $100,000 contribution would probably end up on the front page of the newspaper. She inquired as to what Representative Ogan thought the general public's opinion of that candidate would be. REPRESENTATIVE OGAN stated that the public seems to be tired of what goes on in politics; the public does not care. CHAIR JAMES inquired then as to why this is being done, if people do not care. REPRESENTATIVE OGAN commented that people are jaded and tired of the issue. CHAIR JAMES asked if Representative Ogan believed people acted differently under the current law that does not allow an individual to give more than $500 versus an individual being allowed to contribute $50,000. She commented that she would set her own limit, probably a $1,000 to $2,000 contribution from any one individual. REPRESENTATIVE OGAN indicated that there are ways to get around this such as consulting contracts. CHAIR JAMES asked how a lobbyist would be addressed in this legislation because she did not believe a lobbyist could be denied the ability to contribute to a candidate in that lobbyist's own district. However, she supported not allowing lobbyists to make contributions to candidates. REPRESENTATIVE COGHILL interjected that prohibition was kept. Number 622 CHAIR JAMES commented that the $500 limit is fairly low. She believed that honorable people would not take large contributions which is why she supported not having limits. REPRESENTATIVE COGHILL recognized that there will always be dishonorable people which is the reasoning behind laws and regulations. It is also true that the United States is based on self-government. Representative Coghill said that regulating government on the assumption that everyone is a criminal is not appropriate, although there should be provisions for those who act criminally. Placing responsibility on the general populous with regard to the no limits giving is important in involving people. That resulted in the reporting requirement every 15 days. REPRESENTATIVE COGHILL expressed concern with the Alaska Public Office Commission having regulation-making power, police and judicial-making power simultaneously. There needs to be a separation of powers as well as an easy linkage to move through the reporting process to the judicial process. Representative Coghill commented that he would rather put the public in a position of trust and accountability than the government. In other arenas, people are not assumed to be criminals first, but rather a law is established that if violated would result in going to court. Candidates should have the privilege of an open playing field. Number 0717 CHAIR JAMES noted that the notion that someone is innocent until proven guilty has been dispelled in many cases. In other issues, Chair James expressed concern with civil penalties for a suspected criminal act such as with child abuse. There have been court decisions that say that it is permissible to have a civil and a criminal penalty on a case and that there is authority for civil penalties. Therefore, Chair James did not know if that issue could be won. CHAIR JAMES announced that she would not be appointing a subcommittee on this bill yet, however that may occur next year. She offered to meet on these issues during the interim. Chair James commented that it should be understood that this is a big change and change does not occur in big pieces, but rather small pieces. REPRESENTATIVE OGAN agreed with Chair James comments. [SSHB 179 WAS HELD OVER.] ADJOURNMENT There being no further business before the committee, the House State Affairs Standing Committee meeting was adjourned at 9:38 a.m.